Here's a market update for May 2024

Interest rates and banks' tight lending criteria still have the biggest influence over the prices being achieved.

Many older buyers are now less concerned about capital growth than they were in the past, favouring bank deposits, offering a return of around 6% instead of investing in properties with yields below 6.5%. 

On the other hand, younger investors and family trusts, looking towards the future, are still keen to buy. They are mindful that selling prices, in most cases, are well below replacement cost, so they are confident the property value will rise. 

The majority of syndicators and private investment companies/partnerships are sitting on the fence. Some are keen to sell; however, they are not always able to meet the market on price. Selling at a loss or not at the price their investors were expecting can lead to a loss in investor confidence in the syndicator.

Developers are starting to come back into the market; however, with tighter borrowing criteria, they are being very selective and hard on price.

Owner-Occupier Sales

Buyer inquiry remains strong but not at the level of 2020-21. Prospective buyers are well aware of replacement costs and the potential savings that can be achieved with buying an existing building. 

Many are still shying away from building new, not wanting to spend the time organising the build and preferring to have a building in the next six months rather than waiting 12-18 months.

Overall, there is still a real shortage of properties for sale, highlighting the challenges in today’s market.